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On the Design of Agricultural Policy Mechanisms


  • Robert G. Chambers


The fact that different agricultural policy mechanisms have emerged for different commodities suggests that the choice of policy instrument may reflect the goals of agricultural policy makers. This paper uses the principles of mechanism design under asymmetric information to examine the motivations underlying the choice of agricultural policy mechanisms. It is found that supply control mechanisms favor high-cost producers and the budget, while mechanisms resulting in overproduction favor low-cost producers.

Suggested Citation

  • Robert G. Chambers, 1992. "On the Design of Agricultural Policy Mechanisms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(3), pages 646-654.
  • Handle: RePEc:oup:ajagec:v:74:y:1992:i:3:p:646-654.

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    References listed on IDEAS

    1. Richard E. Just & Wen S. Chern, 1980. "Tomatoes, Technology, and Oligopsony," Bell Journal of Economics, The RAND Corporation, vol. 11(2), pages 584-602, Autumn.
    2. Karp, Larry S & Perloff, Jeffrey M, 1989. "Estimating Market Structure and Tax Incidence: The Japanese Television Market," Journal of Industrial Economics, Wiley Blackwell, vol. 37(3), pages 225-239, March.
    3. Lau, Lawrence J., 1982. "On identifying the degree of competitiveness from industry price and output data," Economics Letters, Elsevier, vol. 10(1-2), pages 93-99.
    4. Karp, Larry S & Perloff, Jeffrey M, 1989. "Dynamic Oligopoly in the Rice Export Market," The Review of Economics and Statistics, MIT Press, vol. 71(3), pages 462-470, August.
    5. Bresnahan, Timothy F., 1982. "The oligopoly solution concept is identified," Economics Letters, Elsevier, vol. 10(1-2), pages 87-92.
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    Cited by:

    1. White, Benedict & Raguragavan, Jananee & Chambers, Robert G., 2007. "Agri-environmental Regulation on the Back of a Data Envelopment Analysis," 81st Annual Conference, April 2-4, 2007, Reading University 7963, Agricultural Economics Society.
    2. Feng, Hongli, 2007. "Green payments and dual policy goals," Journal of Environmental Economics and Management, Elsevier, vol. 54(3), pages 323-335, November.
    3. Brent Hueth, 2000. "The Goals of U.S. Agricultural Policy: A Mechanism Design Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(1), pages 14-24.
    4. Yuki Yano & David Blandford, 2009. "Use of Compliance Rewards in Agri-environmental Schemes," Journal of Agricultural Economics, Wiley Blackwell, vol. 60(3), pages 530-545.
    5. Vergamini, Daniele & Viaggi, Davide & Raggi, Meri, 2016. "Agri-environmental measures and farmers’ rent: evaluating the potential contribution of auctions to increase the efficiency of Agri-environmental schemes in Emilia-Romagna (Italy)," 2016 Fifth AIEAA Congress, June 16-17, 2016, Bologna, Italy 242443, Italian Association of Agricultural and Applied Economics (AIEAA).
    6. repec:kap:enreec:v:69:y:2018:i:1:d:10.1007_s10640-016-0072-9 is not listed on IDEAS

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